Exhibit 10.41
E MPLOYMENT A GREEMENT
T HE P RINCETON R EVIEW ,
I NC .
This
Agreement is between Margot Lebenberg (“Exec”) and The
Princeton Review, Inc. (“TPR”), and is subject to the
terms of the Executive Compensation Policy Statement, the current
form of which is attached as Exhibit A (the “Policy
Statement”). Terms may be defined in The Princeton Review
Glossary dated March l st , 2004. This Agreement
supersedes any previous employment agreement.
|
1.
|
Job Description:
Exec shall serve as the Executive
Vice President and General Counsel of The Princeton Review.
Beginning January 1, 2005, subject to approval by TPR’s Board
of Directors, Exec shall serve as Corporate Secretary of TPR in
accordance with the duties set forth in the Amended and Restated
Bylaws of TPR.
|
|
|
|
|
2.
|
Compensation:
TPR shall pay Exec $262,500 per
year, increasing annually by 3%. Exec shall also receive those
medical, dental, life insurance or other benefits made available by
TPR to the other senior executives of TPR as a class. She shall
also receive a bonus of up to 50% of base salary, based on the
“Bonus Calculation” described below in Appendix A. The
amount of the bonus paid shall be based on the Bonus Calculation
described below in Appendix A, provided, however, that Exec’s
bonus for calendar year 2004 shall be determined as follows: (i)
Exec’s 2004 base bonus shall first be calculated in
accordance with Appendix A and shall not be less than 30% of the
maximum bonus available (the “2004 Base Bonus”) and
(ii) Exec shall receive an amount equal to the 2004 Base Bonus as
prorated by the number of months employed by TPR in
2004.
|
|
|
|
|
3.
|
Signing Bonus:
Provided Exec is still employed by
TPR on the six-month anniversary of the commencement of her
employment, TPR will pay Exec a one-time signing bonus of $12,500.
This bonus will be paid in the first payroll period following such
six-month anniversary.
|
|
|
|
|
4.
|
Stock Option Grant:
On Exec’s first day of
employment, TPR shall grant Exec an option to purchase 55,000
shares of TPR’s Common Stock at fair market value (as
indicated by the closing market price of REVU on such date),
vesting in 16 equal quarterly installments beginning immediately
upon issuance. These options shall be subject to the terms and
conditions of The Princeton Review, Inc. Stock Option Grant
attached hereto.
|
|
|
|
|
5.
|
Term: Exec’s employment shall commence on June
30 th , 2004, and notwithstanding Section 3.1 of the
Policy Statement, this Agreement shall expire on June 29
th , 2006 but shall be automatically extended for
additional two-year periods upon the completion of the initial term
and any two-year extension period thereafter until (i) Exec
voluntarily terminates employment or (ii) TPR gives contrary
written notice to Exec at least 6 months prior to the completion of
the initial term or any two-year extension period thereafter. TPR
will not be under any obligation to make additional option grants
to Exec, such as those described in paragraph 3 above, for any
extension terms of this Agreement unless agreed by TPR and
Exec.
|
|
6.
|
Severance Payments and
Benefits: If TPR
terminates Exec’s employment without Cause, then in addition
to the payments provided under Section 5.1 of the Policy Statement,
but in lieu of the payments provided under Section 5.3 of the
Policy Statement, TPR will pay Exec her base salary plus benefits
for an additional six months. After six months of employment,
Exec’s severance payments and benefits provided in this
paragraph 5 shall be extended by one month, up to a maximum of
twelve months, for each additional two months of full-time
employment.
|
|
|
|
|
7.
|
Change of Control:
In addition to any rights granted to
Exec under paragraph 6 above or Section 6.1 of the Policy
Statement, TPR shall pay Exec her base salary for an additional six
months should TPR terminate Exec’s employment following a
Change of Control. After twelve months of employment, Exec’s
severance payments and benefits provided in this paragraph 6 shall
be extended by one month, up to a maximum of twelve months, for
each additional three months of full-time employment.
|
|
|
|
|
8.
|
Right to be
Connected: Exec will be
provided with or be reimbursed for the reasonable cost of cell
phone service, DSL or cable modem connection service at her primary
residence, and a laptop computer.
|
|
|
|
|
9.
|
Executive Education and
Professional Memberships: TPR agrees that, at the Exec’s request,
Exec may attend up to an aggregate of one week of educational
programs each year, which are generally intended to assist her
perform her job, at no charge to her vacation days. TPR shall pay
up to $10,000.00 each year for such educational programs (including
travel and lodging) at accredited educational institutions. In
addition, TPR shall reimburse Exec for her professional membership
fees up to $2,500 per year.
|
|
|
|
|
10.
|
Department
Structure: TPR agrees
that Exec shall have the authority as General Counsel to hire and
staff the legal department in order to meet operational needs. TPR
and Exec agree that Exec will be able to immediately hire Jackie
Cruz, a paralegal, at a salary not to exceed $100,000. In addition,
commencing January l st , 2005, Exec will have the
authority to hire an additional attorney and a legal secretary if
deemed needed by Exec. Candidates hired by Exec will be subject to
TPR’s customary background check, compensation, and benefits
policies.
|
|
|
|
|
11.
|
Professional Liability
Policy: Commencing prior
to June 30 th , 2004 and continuing through the term of
this Agreement, TPR will obtain and maintain an appropriate policy
of professional liability insurance covering Exec for the services
she renders to TPR under this Agreement.
|
|
|
|
|
12.
|
Permission to Sit on Outside
Boards and Consult: Notwithstanding Section 2.1 of the Policy
Statement, TPR and Exec agree that during the term of this
Agreement, (i) Exec shall be entitled to maintain her existing
consulting practice at current levels; provided that such
activities are not conducted on TPR property and that such
activities do not interfere or conflict with the services provided
under this Agreement, and (ii) in each case subject to the prior
consent of TPR, Exec shall be entitled to serve as a member of the
board of
|
|
|
directors of up to two companies,
provided that such activities do not interfere or conflict with the
services provided under this Agreement.
|
|
|
|
|
13.
|
Non-solicitation:
The restrictions set forth in
Section 2.4.2 of the Policy Statement shall not apply to
Exec’s solicitation of, communication with or other
interaction with Jackie Cruz.
|
|
|
|
|
|
|
/s/ Mark Chernis
|
|
|
/s/ Margot Lebenberg
|
|
|
|
|
|
|
Mark Chernis
|
|
|
Margot Lebenberg
|
|
President, TPR
|
|
|
|
INDEMNIFICATION AGREEMENT
This
INDEMNIFICATION AGREEMENT (“Agreement”) is effective as
of December 14, 2004, by and between THE PRINCETON REVIEW, INC., a
Delaware corporation (the “Company”), and MARGOT T.
LEBENBERG (“Indemnitee”).
WHEREAS,
the Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve the Company and
its related entities;
WHEREAS,
pursuant to its Bylaws and Amended and Restated Certificate of
Incorporation, the Company indemnifies and holds harmless each of
its officers and directors to the fullest extent authorized or
permitted by the Delaware General Corporation Law
(“DGCL”);
WHEREAS,
the Company and Indemnitee are party to an Employment Agreement,
dated as of April, 2004 (“Employment Agreement”),
pursuant to which the Company agreed, among other things, to obtain
and maintain an appropriate policy of professional liability
insurance covering Indemnitee for the services she renders to the
Company (“Liability Insurance”), such Liability
Insurance obligation commencing prior to June 30, 2004 and
continuing through the term of the Employment Agreement;
WHEREAS,
such Liability Insurance was not obtained by the Company to cover
the period prior to October 2, 2004 (the “Uninsured
Period”);
WHEREAS,
the Company has agreed to provide indemnification to Indemnitee in
addition to that set forth in the Company’s Amended and
Restated Certificate of Incorporation for acts or omissions of
Indemnitee which occurred during the term of this Agreement;
and
WHEREAS,
in view of the considerations set forth above, the Company desires
that Indemnitee shall be additionally indemnified by the Company as
set forth herein;
NOW,
THEREFORE, the Company and Indemnitee hereby agree as set forth
below.
1.
Indemnification. The rights and obligations set forth in
this Section 1 are subject in their entirety to the limitation set
forth in Section 11.
(a)
Limitation on Liability. To the fullest extent permitted by
law, the Indemnitee shall not be liable to the Company or it
stockholders under the laws of any jurisdiction for any act
performed, or failure to act, on the request of or on behalf of the
Company or for the benefit of the Company, or on behalf of another
corporation, limited liability company, partnership, joint venture,
trust, employee benefit plan or other enterprise or person for
which or whom the Indemnitee is performing services at the request
of the Company (collectively, “Indemnifiable Conduct”).
Additionally, the Company hereby releases Indemnitee from
Indemnifiable Conduct prior to the date of this
Agreement.
(b)
Indemnification of Expenses. The Company shall indemnify
Indemnitee to the fullest extent permitted by law if Indemnitee was
or is or becomes a party to, a subject or a target of, or witness
or a participant in, or is threatened to be made party to, a
subject or a target of, or a witness of other participant in, any
Claim by reason of (or arising in part out of) any Indemnifiable
Event against any and all Expenses, including any and all interest,
assessments and other charges paid or payable in connection with or
in respect of such Expenses. Such payment of Expenses shall be made
by the Company as soon as practicable but in any event no later
than twenty (20) business days after Indemnitee makes written
demand therefor to the Company.
(c)
Advancement of Expenses. The Company shall pay all Expenses
incurred by Indemnitee in advance of the final disposition of a
Claim as soon as practicable after Indemnitee incurs the same, but
in any event no later than twenty (20) business days after
Indemnitee makes written demand therefor to the Company. Indemnitee
hereby undertakes to repay the amount of any Expenses paid in
advance, if it is ultimately determined that Indemnitee is not
entitled to be indemnified by the Company. The Company may request
Indemnitee tore confirm this undertaking in writing prior to paying
any Expense in advance. Any obligation of Indemnitee to reimburse
the Company for any advance of Expenses shall be unsecured and no
interest shall be charged thereon.
(d)
Reviewing Party. Notwithstanding the foregoing, (i) the
obligations of the Company under Section l(b) and l(c) shall be
subject to the condition that the Reviewing Party shall not have
determined (in a written opinion in any case in which the
Independent Legal Counsel referred to in Section l(e) hereof is
involved) that Indemnitee would not be permitted to be indemnified
under applicable law, and (ii) the obligation of the Company to
make an advance on Expenses shall be subject to the condition that,
if, when and to the extent that the Reviewing Party determines that
Indemnitee would not be permitted to be so indemnified under
applicable law, Indemnitee shall reimburse the Company for all such
amounts theretofore paid; provided, however, that if
Indemnitee has commenced or thereafter commences legal proceedings
in a court of competent jurisdiction for a determination that
Indemnitee should be indemnified under applicable law, any
determination made by the Reviewing Party that Indemnitee would not
be permitted to be indemnified under applicable law shall not be
binding and Indemnitee shall not be required to reimburse the
Company for any advance on Expenses Advance until a final judicial
determination is made with respect thereto (as to which all rights
of appeal there from have been exhausted or lapsed). If there has
not been a Change in Control, the Reviewing Party shall be selected
by the Board of Directors, and if there has been a Change in
Control (other than a Change in Control which has been approved by
a majority of the Company’s Board of Directors who were
directors immediately prior to the Change in Control), the
Reviewing Party shall be an Independent Legal Counsel. If the
Reviewing Party fails to make a determination, within thirty (30)
days after written demand to make such a determination, or if the
Reviewing Party determines that Indemnitee substantively would not
be permitted to be indemnified in whole or in part under applicable
law, Indemnitee shall have the right to commence an action for a
declaratory judgement or other appropriate relief in a federal or
state court located in the City, State and County of New York or in
the State of Delaware, seeking a determination by the Reviewing
Party or challenging any such determination by the Reviewing Party
or any aspect thereof. Any determination by the Reviewing Party
shall otherwise be conclusive and binding on the Company and
Indemnitee.
2
(e)
Change in Control. The Company agrees that if there is a
Change in Control of the Company (other than a Change in Control
which has been approved by a majority of the Company’s Board
of Directors who were directors immediately prior to such Change in
Control), then with respect to all matters thereafter arising
concerning the rights of Indemnitee to payment of Expenses and
advances of Expenses under this Agreement or any other agreement or
under the Company’s Certificate of Incorporation or Bylaws as
now or hereafter in effect, Independent Legal Counsel, if desired
by Indemnitee, shall be selected by Indemnitee and approved by the
Company (which approval shall not be unreasonably withheld or
delayed). Such counsel, among other things, shall render its
written opinion to the Company and Indemnitee as to whether and to
what extent Indemnitee would be permitted to be indemnified under
applicable law and the Company agrees to abide by such opinion. The
Company agrees to pay the reasonable fees of the Independent Legal
Counsel referred to above and to indemnify fully such counsel
against any and all expenses (including attorneys’ fees),
claims, liabilities and damages arising out of or relating to this
Agreement or its engagement pursuant hereto.
Notwithstanding any other
provision of this Agreement, the Company shall not be required to
pay Expenses of more than one Independent Legal Counsel in
connection with all matters concerning a single Indemnitee, and
such Independent Legal Counsel shall be the Independent Legal
Counsel for any or all other Indemnitees who are seeking
indemnification from the Company with respect to any single event
or occurrence or series of related events or occurrences, unless
(i) the Company otherwise determines or (ii) any Indemnitee shall
provide a written statement setting forth in detail a reasonable
objection to such Independent Legal Counsel representing other
Indemnitees.
(f)
Mandatory Payment of Expenses. Notwithstanding any provision
of this Agreement other than Sections 4 and 8 hereof, to the extent
that Indemnitee has been successful on the merits or otherwise,
including, without limitation, the dismissal of a Claim without
prejudice, in defense of any Claim regarding any Indemnifiable
Event, the Company shall indemnify Indemnitee against all Expenses
incurred by Indemnitee in connection therewith to the extent
permitted by law.
2.
Indemnification Procedure.
(a)
Notice/Cooperation by Indemnitee. Indemnitee shall, as a
condition precedent to Indemnitee’s right to be indemnified
or be advanced Expenses under this Agreement, give the Company
notice in writing as soon as practicable of any Claim made against
Indemnitee for which indemnification will be sought under this
Agreement. Notice to the Company shall be directed to the President
of the Company at the Company’s address (or such other
address as the Company shall designate in writing to Indemnitee).
In addition, Indemnitee shall cooperate with the Company and its
insurers and their respective counsel, and provide such information
and assistance as it, the insurers and their respective counsel may
reasonably require and as shall be with Indemnitee’s power in
connection with the defense of the Claim.
(b)
No Presumptions: Burden of Proof. For purposes of this
Agreement, the termination of any Claim, judgment, order,
settlement (whether with or without
3
court approval) or conviction, or
upon a plea of nolo contendere , or its equiv
